Documenti di Didattica
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APRIL 2017 (As of 28th April 2017) For updated information, please visit www.ibef.org 1
TEXTILES AND APPAREL
❖ Executive Summary………………....………..3
❖ Advantage India……………………..………..5
❖ Market Overview and Trends………..……...7
❖ Porters Five Forces Analysis ……...………21
❖ Strategies Adopted…………………………23
❖ Growth Drivers……………………………...25
❖ Opportunities………………………………..38
❖ Success Stories…………………………..…41
❖ Useful Information…………………………..47
CAGR: 12.06%
82 Textile & apparel exports from
Favourable trade policies and
India is expected to increase to
superior quality to drive textile
39.66 USD82 billion by 2021 from
exports
18.76 USD39.66 billion in 2016
64.3 64.6
53.5 Total cloth production in India is
Increase in domestic demand has grown to 53.5 billion square
set to boost cloth production metres in FY17 from 64.6 billion
square metres in FY16
FY15 FY16 FY17⁽¹⁾
Billion square metres
Source: Ministry of Textiles, Make in India, Technopak, TechSci Research
Notes: CAGR - Compound Annual Growth Rate, E – Estimate, P – Provisional; ⁽¹⁾- up to January 2017
APRIL 2017 For updated information, please visit www.ibef.org 3
TEXTILES AND APPAREL
EXECUTIVE SUMMARY … (2/2)
ADVANTAGE INDIA
TEXTILES AND APPAREL
ADVANTAGE INDIA
2016 Robust
GrowingDemand
demand Increasing Investments 2023F
• Increased penetration of organised retail, • Huge investments are being made by
Market favorable demographics & rising income Market
Government under Scheme for Integrated
Value: levels to drive textile demand Value:
Textile Parks (SITP)-(USD184.98 million) &
USD137 Technology Upgradation Fund Scheme USD226
• Growth in building & construction will
billion (TUFS)-(term loan sanctioned in Feb, 2015- billion
continue to drive demand for non-clothing
textiles USD2198.45 million) to encourage more
private equity & to train workforce.
Advantage
India
Competitive Policy Support
Advantage • 100 per cent FDI (automatic route) is
• Abundant availability of raw materials such allowed in the Indian textile sector
as cotton, wool, silk and jute • Under Union Budget 2016-17, the
government has allocated USD7.43 million
• India enjoys a comparative advantage in
for setting up integrated parks in India
terms of skilled manpower & in cost of
production relative to major textile producers • Free trade with ASEAN countries &
proposed agreement with European Union
will boost exports
Source: PHD Camber of Commerce; Federation of Indian Chambers of Commerce and Industry, TechSci Research
Notes: SITP - Scheme for Integrated Textile Park; FDI - Foreign Direct Investment,
ASEAN - Association of Southeast Asian Nations, E – Estimate; F-Forecasted
APRIL 2017 For updated information, please visit www.ibef.org 6
TEXTILES AND APPAREL
2016-Onwards
2000-15
1951-2000
1901–1950
• Make in India campaign was
• SITP was implemented to launched to attract manufacturers
facilitate setting up of textile & FDI.
• In 1999, TUFS was set units with appropriate support • Technology Mission for Technical
1854-1900 up to provide easy infrastructure Textile has been continued.
access to capital for • After MFA cotton prices are • Under Union Budget 2017-18,
• Number of mills technological up aligned with global prices Government of India allocated
increased from 178 in gradation
• Technical textile industry will around USD926.66 million for
1901 to 417 in 1945 • TMC was launched to textile Industry. Major focus of
be a new growth avenue
address issues related
• The first cotton textile • Out of 423 textile mills
to low productivity and
• Free trade agreement with this budget is to attract
mill of Mumbai was of the undivided India, ASEAN countries and manufacturers, initiate technology
India received 409 after infrastructure upgradation & setup Integrated
established in 1854 proposed agreement with EU
partition and the • In 2000, NTP was under discussion textiles parks, etc.
• The first cotton mill of announced for the
remaining 14 went to
Ahmedabad was • Restructured TUFS was • Measures were also announced
Pakistan overall development of to be taken to foster faster
found in 1861; it launched attracting a subsidy
the textile and apparel clearance of import & export
emerged as a rival cap of USD420.65 Million
industry cargo
centre to Mumbai
Notes: NTP - National Textile Policy; NTC - National Textiles Corporation; ASEAN - Association of Southeast Asian Nations, TUFS - Technology Upgradation Fund Scheme;
TMC - Technology Mission on Cotton, EU - European Union, Source: Union Budget 2015-16, Make In India
The textile and apparel industry can be broadly divided into two segments:
Yarn and fibre (include natural and man-made)
Processed fabrics (including woolen textiles, silk textiles, jute textiles, cotton textiles & technical textiles),
Readymade Garments (RMGs) & apparel
Cotton, Final
Processed
Output jute, silk, Fibre⁽¹⁾ Yarn Fabric garment/
fabric
wool Apparel
India accounts 63 per cent of the market share of textiles and garments
With production of 6,106 million kg, India was the largest producer of cotton in 2016-17.
Indian textile industry accounts for about 24 per cent of the world’s spindle capacity and 8 per cent of global rotor capacity
India has the highest loom capacity (including hand looms) with 63 per cent of the world’s market share
India accounts for about 14 per cent of the world’s production of textile fibres & yarns (largest producer of jute, 2nd largest
producer of silk and cotton; & 3rd largest in cellulosic fibre)
India is the 2nd largest producer of Manmade Fibre & Filament, globally, with production of around 2,11 million kg in 2016-
17(1).
Textile plays a major role in the Indian economy India's textile market size (USD billion)
226
It contributes 14 per cent to industrial production and
4 per cent to GDP
To improve technical skills in apparel industry government established 75 apparel training & design centres across India
National Institute of Fashion Technologies played pioneering role in growth of apparel industry & exports
To promote apparel exports 12 locations have been approved by the government to set up apparel parks for exports
The government is planning to conduct roadshows to promote the country's textiles in non-traditional markets such as
South America, Russia & select countries in West Asia
As of November 2016, the Central Board of Excise and Customs has extended draw back facility for textiles industries
from 7.3 per cent to 7.5 per cent. This would improve the competitiveness of textile exporters based in India
Production of raw cotton in India grew from 28 million bales Production of raw cotton (million bales)
in FY07 & further increased to 35.2 million bales in FY16
During FY07-16, raw cotton production expanded at a
CAGR of 2.6 per cent CAGR: 2.6%
39.8
During FY16(1), of the overall amount of raw cotton 38
35.3 35.6 35.2
produced in the country, domestic consumption totaled to 33.9
30 million bales, while in FY15(1), the domestic consumption 30.7 30.5
28 29
of raw cotton stood at 30.4 million bales
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
• Raw cotton and man-made fibres are major segments in this category
• Raw wool and raw silk are other components – their production levels are much lower
Production of man-made fibre has also been on an upward Production of man-made fibre (million tonnes)
trend
1
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17*
Production of yarn grew to 5665 million Kgs in FY16 from Production of yarn (Million kg)
4712 million Kgs in FY11, implying a CAGR of 3.75 per cent
5488.00 5665.00
Production of yarn between April to January’17 stood at 5309.00
4712.00 4867.00 4727.00
4727 million Kg
4372.00
1
FY11 FY12 FY13 FY14 FY15 FY16 FY17
10,449
15,335 10,809
metre in FY16 from 52,665 million square metres in FY07,
10,062
8,278
9,282
7,767
8,468
implying a CAGR growth of 2.53 per cent. In addition, fabric
6,888
6,766
production in India stood at 53,513 million square meter in
12,118 9132
16,924
FY17(1)
17,094
18,797
21,675
20,567
22,840
21,173
20,534
Cotton yarn, a major segment in FY15, accounted for more
than 57 per cent share in fabric production, with the share
reaching to 60.29 per cent in FY17(1)
38,440
36,959
35,513
33,870
32,263
31,718
30,570
28,914
27,196
26,898
Fibre production in India is expected to reach 10 million
tonnes by 2017-18, growing from 9 million tonnes in 2015-16.
(1)
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Exports have been a core feature of India’s textile & apparel India's textile trade (USD billion)
sector, a fact corroborated by trade figures
41.4
41.1
Exports in textile and apparel sector stood at USD26.91
33.3
31.7
billion in FY17 in comparison with USD27.9 billion in FY16
26.91
27.9
27.8
As of November 2016, the government has extended the
22.4
22.1
21.2
19.1
duty drawback facility on all textile products & increased the
17.6
rates in some cases for 1 year to boost exports in the sector
4.97
5.4
5.2
3.04
4.6
4.2
3.5
3.4
3.3
2.8
2.7
2.7
Exports Imports
Source: Ministry of Textiles, Budget 2015, TechSci Research
Note: FY17 (3) Data for April-December 2016
The domestic textile & apparel industry was the largest Shares in India’s textile exports (FY16)
contributor to total textile & apparel exports from India in
FY16 the segment had a share of 91.4 per cent. This
segment includes readymade garments, jute, cotton, silk
etc.
The handicrafts segment accounted for 8.60 per cent of the 8.60%
total exports in FY16.
Handicrafts
91.40%
Bombay Dyeing & Manufacturing Bed linen, towels, furnishings, fabric for suits, shirts,
Company Ltd dresses, saris in cotton &d polyester blends
• With the expiry of MFA in January 2005, cotton prices in India are now fully integrated with
Multi-Fibre Arrangement
international rates. In 2014, the government has cleared 13 proposal of new textile parks
(MFA) in different states.
Public-Private • The Ministry of Textiles commenced an initiative to establish institutes under the Public-
Partnership (PPP) Private Partnership (PPP) model to encourage private sector participation in the
development of the industry
• Technical textiles, which has been growing at around twice the rate of textiles for clothing
applications over the past few years, is now expected to post a CAGR of 20 per cent over
Technical textiles FY11-17
• USD70.83 million has been allocated to promote the use of geotechnical textiles in the
North East states.
STRATEGIES ADOPTED
TEXTILES AND APPAREL
STRATEGIES ADOPTED
• As of November 2016, the Ministry of Textiles signed MoUs with 20 e-commerce firms to engage with various
handloom & handicraft clusters. This would also provide them a direct marketing platform.
Focus on high • In March 2017, Amazon India Fashion Week (AIFW), is set to feature “Golden Threads of Assam,” with a
view to preserve & promote Muga culture. The show will held at the National Rail Museum in New Delhi.
growth domestic
market • In strategic alliance with importers from UAE, the 1st ever exhibition of, “Incredible Indian Textiles” was held in
Dubai in February 2017. The event was organized by Synthetic & Rayon Textiles Export Promotion Council
(SRTEPC) of India & witnessed participation of 19 Indian companies.
• In March 2017, Welspun India Ltd opened a new plant - Needle Entangled Advance Textile Plant in Anjar,
Gujarat, to manufacture multi-layer composites for various applications. The plant is worth USD23.35 million.
• Welspun India said in a BSE filing that 3 MoUs are being signed with the state government at the ongoing
Vibrant Gujarat Summit 2017. The group, which has presence in home textiles, line pipes & infrastructure, will
Focus on invest USD307 million in setting up an integrated textile manufacturing zone.
backward • Welspun India will invest around USD153 million on capacity enhancement of its technical textile business,
integration while a similar amount has been earmarked for its advanced textile arm that makes specialised materials for
aerospace, defense & automobiles.
• Vardhman Textiles Ltd has entered into garment manufacturing business through a collaboration with
Nisshinbo, a Japanese manufacturer of yarns
Focus on forward
• In February 2017, Future Retail, entered into an agreement with UK based home furnishing brand - Laura
integration Ashley, to operate and own stores & websites in India
• The Indian fashion retailers online market is poised to grow to USD30 billion by the 2020, currently the online
market is valued at USD7-9 billion.
Diversification • Raymond group under its group company J.K.Helene Curtis is looking to ramp up male grooming segment by
unleashing new variants of shampoos & deos
APRIL 2017 Source: Annual Reports and Company For updated information, please visit www.ibef.org 24
Presentations, TechSci Research
TEXTILES AND APPAREL
GROWTH DRIVERS
TEXTILES AND APPAREL
STRONG FUNDAMENTALS AND POLICY SUPPORT AIDING GROWTH
Inviting Resulting in
• Allocation of USD39.8
Union Budget million for apparel parks
Some of the key tax reliefs in under SITP
Budget FY17:
• USD26.05 million have
• Excise duty has been Tax sops and
Infrastructure been allocated for NER
relaxed, and is expected to financial
support Textile Promotion Scheme
encourage manufacturing, package
under the “Make in India” • USD1.33 million has been
campaign allocated to Trade
Facilitation Centre & Craft
Museum
By 2014, India’s population had almost doubled compared India‘s population in billions
to figures 30 years before
The IMF expects India’s population to touch 1.34 CAGR: 1.72%
billion by end-2019 as compared to 1.28 billion in 1.34
1.26 1.28 1.29
2015 1.20
India’s growing population has been a key driver of textile 1.03
consumption growth in the country 0.85
Moreover, according to World Bank, urban population 0.69
accounts for 32.7 per cent of the total population of India.
This also works as demand driver due to changing taste &d
preferences in the urban part of India
It has been complemented by a young population which is
growing & at the same time is exposed to changing tastes &
fashion 1980 1990 2000 2010 2014 2015 2016 2019F
Complementing this factor is rising female workforce Source: World Bank, TechSci Research
participation in the country Note: F - Forecasts
Rising incomes has been a key determinant of domestic demand for the sector; with incomes rising in the rural economy as
well, the upward push on demand from the income side is set to continue
Rising industrial activity would support the growth in the per capita income
8.0% 244
2000 273 322
6.0%
1500 4.0% 15%
30% 26%
2.0% 32%
1000 40%
43%
0.0% 29%
1430.2
1552.5
1514.6
1504.5
1595.7
1702.1
1832.8
1978.6
2128.8
2302.5
500 25%
-2.0% 23% 17%
3% 1% 6% 3% 7%
0 -4.0% 2015 2020 2030
Globals(>22065.3) Strivers(11032.7-22065.3)
Income
segment Seekers(4413.1-11032.7) Aspirers(1985.9-4413.1)
GDP per capita, current prices Growth Rate (USD) Deprived(<1985.9)
Capacity built over years has led to low cost of production Growing textile and clothing exports from India
per unit in India’s textile industry; this has lent a strong (USD billion)
competitive advantage to the country’s textile exporters
relative to key global peers
The sector has also witnessed increasing outsourcing over
the years as Indian players moved up the value chain from
being mere converters to vendor partners of global retail CAGR: 8.56% 41.4 40.0
39.3
giants
33.3 31.7
The strong performance of textile exports is reflected in the 27.8
value of exports from the sector over the years. Textile 22.1 21.2 22.4
exports witnessed a growth (CAGR) of 8.56 per cent over 17.6 19.1
the period of FY06 to FY16
In the coming decades, Africa & Latin America could very
well turn out to be key markets for Indian textiles
In April 2017, the government will soon unveil Textiles India
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
2017, its 1st ever global B2B handicrafts & textile event, in
Delhi. It is to promote “farm to foreign” policy which is aimed
at strengthening the supply chain of textile & apparel Source: Ministry of Textiles, Budget 2015, TechSci Research
industry in India. The event will showcase a 1000 stalls, and
there will be participation from 2500 international agents,
buyers, retail chains, designers across the globe, and
15,000 domestic buyers.
The major service offerings of the technical textile industry Technical textile industry (USD billion)
include thermal protection & blood-absorbing materials,
seatbelts & adhesive tapes
CAGR: 9.6%
The technical textile industry is expected to expand at a 32
CAGR of 9.6 per cent during FY14–23 to USD32 billion in
FY23
23.58
The targeted market size would be achieved by targeting
non-woven technical textiles
Healthcare & infrastructure sectors are major drivers of the
technical textile industry
India is expected to be a key growth market for the technical
textile sector due to cost-effectiveness, durability &
versatility of technical textiles
The government has supported the technical textile industry FY17E FY23E
with an allotment of USD1 billion for SMEs & an exemption
in custom duty for raw materials used by the sector Source: Chamber of Commerce,
Indian Technical Textile Association, TechSci Research
Notes: SME - Small and Medium Enterprises, E – Estimates;
Figures mentioned are as per latest data available
India’s home textile industry is expected to expand at a CAGR Indian home textile industry (USD billion)
of 8.3 per cent during 2014–21 to USD8.2 billion in 2021 from
USD4.7 billion in 2014
8.2
India accounts for 7 per cent of global home textiles trade. CAGR: 8.3%
Superior quality makes companies in India a leader in the US
& the UK, contributing two-third to their exports 5.5
4.7
Indian products has gained a significant market share in global
home textiles in the past few years
The growth in the home textiles would be supported by
growing household income, increasing population & growth of
end use sectors like housing, hospitality, healthcare, etc.
In 2016, Indian home textile industry is estimated at USD5.5
2014 2016E 2021E
billion.
• Investment was made to promote modernisation & up-gradation of the textile industry by
Technology Up- providing credit at reduced rates
gradation Fund Scheme • US$0.23 billion has been allocated for ATUFS scheme for FY16-17, under Union Budget
(TUFS) 2016-17
Foreign Direct • FDI of up to 100 per cent is allowed in the textile sector through the automatic route
Investment
• SITP was set up in 2005 to provide necessary infrastructure to new textile units; under
SITP, 40 projects (worth USD678 million) have been sanctioned
• Out of these 40 projects, 27 have started production. 16 projects has been completed in
Scheme for Integrated November 2014. Government has invested a total of USD21.96 million for 21 new textile
Textiles Parks (SITP) parks & the remaining 13 textile parks has been given the in-principle approval under
SITP. In 2015, textile parks set up under the Scheme for Integrate Textile Park (SITP)
attracted an investment of USD4.58 billion.
Technical textile • Government of India has planned an increase in the fund outlay for technical textiles
industry industry to more than USD117 million during the current 12th Five Year Plan (2012-17)
100 per cent FDI is approved in the sector Trends of FDI in Textile Industry (USD million)
International apparel giants, such as Hugo Boss, Liz FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Claiborne, Diesel & Kanz, have already started operations
in India
Source: Ministry of Commerce and Industry,
DIPP, TechSci Research
OPPORTUNITIES
TEXTILES AND APPAREL
OPPORTUNITIES … (1/2)
• The Indian textile industry is set • The Central Silk Board sets • For the textile industry, the
for strong growth, buoyed by targets for raw silk production & proposed hike in FDI limit in
both strong domestic encourages farmers & private multi-brand retail will bring in
consumption as well as export players to grow silk more players, thereby providing
demand more options to consumers
• To achieve these targets,
• The sector is expected to reach alliances with the private sector, • It will also bring in greater
USD226 billion by FY2023 especially major agro-based investments along the entire
industries in pre-cocoon & post- value chain – from agricultural
• Population is expected to reach
cocoon segments has been production to final manufactured
to 1.34 billion by FY2019 encouraged goods
• Urbanisation is expected to
• With global retail brands assured
support higher growth due to of a domestic foothold,
change in fashion & trends outsourcing will also rise
significantly
SUCCESS STORIES
TEXTILES AND APPAREL
RAYMOND: A LONG JOURNEY OF SUCCESS
Launch of the
Makers brand -
Retail 2011
FY16
JV with GAS in
USD854.7
Furnishings India - 2007
million
turnover
Acquisition of FY08
ColorPlus - USD595
Corporate wear 2002 million
turnover
Capacity of 40
On December
MM -1996 In 2016,
Woollen outerwear 06, 2016,
Raymond
1980 Raymond &
invested
Organic Transformed KVIC joined
USD68.74 million
growth in into industrial together to
for a new textile
Apparels textiles conglomerate introduce a new
unit, having an
1964 clothing line,
annual production
Vertical under the brand
capacity of 20
integration in name of ‘Khadi’
million metres of
multi-fibres cotton fabric
Fabrics
1925 1958 1964 1968 1990 1996 2000 2002 2006 2007 2008 2010 2011 2012 2013 2014 2015 2016
Source: Company Presentation, TechSci Research
Notes: JV - Joint Venture, MM - Million Meters, KVIC - Khadi and Village Industries Commission
APRIL 2017 For updated information, please visit www.ibef.org 42
TEXTILES AND APPAREL
ALOK INDUSTRIES: INTEGRATED TEXTILE SOLUTIONS
Focus on speciality
fabrics; plans to
Polyester yarn enter in technical
textiles
Welspun India was incorporated in 1985, with presence in more than 50 countries. The company is the world leader in a range of home
textiles products
Wide
Focus on
distribution
innovation • Capacity – 72 million
network
metre/Year
Growth Bed linen products
• Location - Anjar
strategy
• Capacity utilisation - 97%
Welspun ranked 1st in home textile supplies to US in FY16 by Home & Textiles Today, a leading industry magazine
During FY10-16, revenue of Welspun increased at a CAGR of 10.8 per cent, in USD terms
During FY10-16, EBITDA of Welspun increased at a CAGR of 21.8 per cent, in USD terms
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Source: Company Presentation, TechSci Research
Note: EBIDTA - Earnings Before Interest, Taxes, Depreciation and Amortization
APRIL 2017 For updated information, please visit www.ibef.org 45
TEXTILES AND APPAREL
TIRUPUR: TEXTILES HUB OF INDIA
The city has more than 5000 garment manufacturing & job work units & is one of the most organised processing & finishing
garment clusters in India
Its hosiery hub became the 1st textile cluster in India to comply with zero liquid discharge guidelines
USEFUL INFORMATION
TEXTILES AND APPAREL
INDUSTRY ASSOCIATIONS
USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
Year INR equivalent of one USD Year INR equivalent of one USD
2004–05 44.81
2005 43.98
2005–06 44.14
2006 45.18
2006–07 45.14
2007–08 40.27 2007 41.34
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